Janice H. Dore' VS Shelter Mutual Insurance Company
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT 2013 CA 0545 JArTICE H DORE VERSUS SHELTER MUTUAL INSURANCE COMPANY DATE OFJUDGMENT NOV 0 1 2013 ON APPEAL FROM THE TWENTY JUDICIAL DISTRICT COURT SECOND NUMBER 2009 DNISION D PARISH OF ST TAMMANY 15250 STATE OF LOLTISIANA HONORABLE PETER 7 GARCIA JUDGE David A Oriol Counsel for Plaintiff Appellee Madisonville Louisiana Janice H Dore Craig J Fontenot Baton Rouge Louisiana Counsel for Defendant Appellant Shelter Mutual Insurance Company BEFORE KLJHN HIGGINBOTHAM AND THERIOT JJ Disposition AFFIRMED AND REMANDED KUHN J appellant Defendant Shelter Mutual Insurance Company appeals a partial summary judgment in favor of plaintiff Janice H Dore awarding her appellee 63 677 62 under a homeowner spolicy for storm damage to her house For the following reasons we affirm FACTUAL AND PROCEDURAL BACKGROUND Due to high winds from Hurricane Gustav on September 1 2008 a tree fell through the roof of Ms Dore home in Madisonville Louisiana causing s substantial damage A policy of homeowner insurance issued by Shelter Mutual s and covering Ms Dore property for replacement cost value was in effect at that s time After Ms Dore provided Shelter Mutual with several proofs of loss claiming a total loss of 91 Shelter Mutual tendered payments to Ms Dore totaling 60 279 37 937 12 Due to the parties disagreement regarding the amount of the loss on April 16 2009 Ms Dore demanded an appraisal in accordance with the following provision of the policy Appraisal If you and we fail to agree on the actual cash value ar amount of loss either party may make written demand for an appraisal Each party will select an appraiser and notify the other of the appraiser identiry s within 20 days after the demand is received The appraisers will select a competent and impartial umpire If the appraisers are unable to agree upon an umpire within 15 days you or we can ask a judge of a court of record in the state where the residence premises is located to select an umpire The appraisers shall then appraise the loss stating separately the actual cash value and loss to each item If the appraisers submit a written report of an agreement to us the amount agreed upon shall be the actual cash value or amount of loss Ifthey cannot agree they will submit their differences to the umpire A written award by two will determine the actual cash value or amount ofloss Each party will pay the appraiser it chooses and equally pay expenses far the umpire and all other expenses of the appraisal Italics added These consisted of a payment of 8 on December 13 2008 for wind damage a 54 193 payment of 4 on December 16 2008 for personal property loss and a payment of 07 403 76 340 on January 22 2009 for supplemental wind damage 2 In accordance with this provision each party appointed an appraiser The two appraisers jointly selected an umpire to settle any differences between them Thereafter on September 2 2009 Ms Dore filed a suit for damages against Shelter Mutual seeking the actual value of her loss less her deductible and payments received as we11 as penalties and attorney fees for Shelter Mutual s alleged failure to deal with her claim in good faith and make timely payment Once suit was filed Shelter Mutual refused to participate further in the appraisal procedure and its appraiser did not attend an August 4 2010 appraisal meeting even though given notice thereof On August 6 2010 the umpire issued an appraisal award concluding the total cash value of Ms Dore loss was 96 and the total replacement cost s 00 051 value was 00 732 103 Ms Dore appraiser signed the appraisal award s indicating his agreement with the umpire conclusions On August 30 2011 s Shelter Mutual issued an additional 16 payment to Ms Dore for 00 000 supplemental wind damage On September 5 2012 Ms Dare filed a motion for summary judgment on the basis that it was undisputed Shelter Mutual had failed to comply with the policy provision requiring it to pay the cash value of the loss within 30 days after we Shelter Mutual receive your Ms Dore proof of loss and the amount of loss is finally determined by an appraisal award Consequently she asserted Shelter Mutual was liable for the cash value of the loss less her deductible and payments received as well as for statutory penalties attorney fees and costs under La R 22 1892 due to Shelter Mutual arbitrary and capacious failure to S 1 B s pay the amount due under the policy In opposition Shelter 1V argued that the relief sought by Ms Dare in utual the motion for summary judgment was beyond the scope of her pleadings that the s policy appraisal provision was not enforceable judicially because it was not an 3 arbitration agreement and that to the extent it could be construed as such it violated the prohibition contained in La R 22 against any policy provision S 868 depriving the courts of this state ofjurisdiction over an action against an insurer Following a hearing the district court granted partial summary judgment in favor of Ms Dore for 62 based on the appraisal award but denied 63 677 summary judgment on Ms Dore claim for statutory penalties and attorney fees s Pursuant to La C art 1915 the court designated the partial summary P 1 B judgment as final finding no just cause for delay Shelter Mutual now appeals arguing on several grounds that the district court erred in granting the partial summary judgment In an answer to the appeal Ms Dore asserts the district court erred in denying summary judgment on her claim for statutory penalties and attorney fees DISCUSSION Appellate courts review summary judgments de novq using the same criteria that govern the district court consideration of whether summary judgment is s appropriate Costello v Hardy 03 La 1 864 So 129 137 A 1146 04 21 2d motion for summary judgment should only be granted if the pleadings depositions answers to interrogatories and admissions on file together with the affidavits if Z Louisiana Revised Statutes 22 provides in pertinent part that 868 A No insurance contract delivered ar issued for delivery in this state and covering subjects located resident or to be performed in this state shall contain any condition stipulation or agreement 2 Depriving the courts of this state of the jurisdiction of action against the insurer The Louisiana Supreme Court has held that arbitration agreements are violative of this provision and therefore are unenforceable if contained in an insurance policy Doucet u Dental Health Plans Management Corporation 412 So 1383 1384 La 1982 2d 3 The district court concluded there was no just cause for delay and designated the partial judgment as final although it gave no reasons for its conclusion Nevertheless based on our de novo review of the relevant factors outlined in R Messinger Inc v Rosenblum 04 La J 1664 OS 2 3 894 So 1113 1122 we find the designation was proper 2d 4 any show that there is no genuine issue as to material fact and that the movant is entitled to summary judgment as a matter of law La C 966 PB 2 Initially Shelter Mutual contends the partial summary judgment was improper because the relief it granted was outside the scope of Ms Dore s pleadings since she did not plead for enforcement of the appraisal award in her petition for damages Shelter Mutual further argues that the continuation of the appraisal procedure once suit was filed was an impermissible attempt to divest the district court of jurisdiction Additionally Shelter Mutual contends the policy s appraisal provision was not judicially enforceable because it was not an arbitration agreement and to the extent that it could be so construed it violated La R S 868 22 These contentions lack merit In her petition for damages Ms Dare sought an award for the cash value of her loss pursuant to the policy issued to her by Shelter Mutual In her subsequent motion for partial summary judgment she requested that the district court apply the unambiguous language of that policy requiring Shelter Mutual to pay the amount of her loss as determined by the appraisal procedure outlined therein Clearly the relief Ms Dore sought by summary judgment was encompassed in her claim for damages due to her under the policy Nor is there merit in Shelter Mutual contentions that the appraisal s provision violates La R 22 by divesting the district court of jurisdiction S 868 over Ms Dore claim s Branch u eld Sprin Fire Appraisal provisions are enforceable in Louisiana Marine Ins Co of Sprin Mass 198 La eld 720 727 4 So 806 809 La 1941 Dufrene u Certain Interested 2d Underwriters at Lloyd of London Subscribing to Certificat No 3051393 s 1002 ll La App Sth Cir 3 91 So 397 400 writ denied 90 So 12 27 3d 3d 0930 1065 2012 La 6 Sevier 12 15 v F S U G 485 So 132 136 La 2d App 2d Cir reversed on other 497 So 1380 La 1986 Girard v rounds 2d 5 Atlantic Mutual Insurance Company 198 So 444 447 La App 4th Cir 2d 1967 Appraisal provisions are distinct from arbitration agreements and do not contravene La R 22 by divesting courts ofjurisdiction DuJrene 91 So S 868 3d at 400 Sevier 485 So at 136 Girard 198 So at 447 The duty of appraisers 2d 2d is merely to ascertain the extent and value of an insured loss and not to determine s an insurer liability Officer u American Eagle Fire Ins Co 175 La 581 597 s 143 So 500 504 La 1932 Girard 198 So at 446 Moreover such awards 2d are subject to the scrutiny of the courts if it appears the appraisers did not perform their duties under the policy thereby clearly falling within the court sjurisdiction See Branch 198 La at 727 4 So at 809 Sevier 485 So at 136 Girard 198 2d 2d 2d So at 447 Our conclusion that appraisal clauses are not violative of La R 22 is S 868 strengthened by the fact that this statute was enacted in the same legislative act as La R 22 which sets forth the standard provisions required for fire S 1311 insurance policies issued on Louisiana property The significance of this point is that one of the standard provisions included in La R 22 is an appraisal S 1311 clause that is substantially the same as the one contained in the Shelter Mutual policy Having so provided indicates that the Legislature did not intend appraisal clauses to fall within the category of policy provisions prohibited by La R S 2 A 868 22 Additionally despite Shelter MutuaPs contention that appraisal procedures are intended exclusively as pre settlement tools and are not viable after suit is suit filed demands for appraisal have been permitted even after suit has been filed See Duf 91 So at 398 Newman x Lexington Insurance Company No rene 3d 4668 06 2007 WL 1063578 pp 3 E La 4 unpublished Moreover 4D 07 4 Louisiana Revised Statutes 22 originally was enacted as La R 22 and La R 868 S 629 S 1311 22 originally was enacted as La R 22 by La Acts 1958 No 125 These statutes S 691 subsequently were renumbered as currently referred to by La Acts 2008 No 415 January 1 2009 6 1 effective the instant policy contains no prohibition against appraisal proceedings after suit is filed See Newman 2007 WL 1063578 at pp 3 4 An insurance policy is a contract between the insured and the insurer and has the effect of law between them Latino u Jor 11 La App ist Cir es 0463 12 10 2 91 So3d 335 338 In this case the policy unambiguously provided that either party could demand an appraisal and that an appraisal award reached in accordance with the procedure outlined therein will determine the actual cash value or amount of loss Pursuant to the provisions of the policy Ms Dore clearly was entitled to summary judgment awarding her the unpaid portion of her losses in accordance with the appraisal award The district court did not err in awarding partial summary judgment in her favor on this issue ANSWER TO APPEAL In her answer to Shelter Mutual appeal Ms Dore contends the district s court erred in denying that portion of her motion for summary judgment requesting an award for statutory penalties and attorney fees under La R 22 S 1892 In order to assess penalties and attorney fees against the insurer under this statute it must clearly be shown that the insurer was in fact arbitrary capricious and without probable cause in refusing to pay La R 22 S 1892 1 B Jones u Johnson 45 La App 2d Cir 12 56 So 1016 1023 847 10 15 3d Further a determination of whether an insurer failure or refusal to pay within the s time limits is arbitrary capricious or without probable cause is primarily a factual question dependent upon facts known to the insurer at the time of the insurer s action Louisiana Bag Company Inc v Audubon Indemnity Company 08 0453 La 12 999 So ll04 ll 14 Cryer u Gulf Insurance Company 276 08 2 2d 2d So 889 892 La App lst Cir 1973 On her motion for summary judgment Ms Dore bore the burden of proof on this issue La C art 966 P C 7 Although Ms Dore sufficiently supported her claim that Shelter Mutual did not tender the full amount of her loss the evidence she presented in support of her motion was insufficient to establish that Shelter Mutual was arbitrary capricious or without probable cause in f do so Consequently summary judgment iling to was precluded by the existence of a material issue of fact with regard to this issue Based on our de novo review we find no error in the district court ruling denying s summary judgment on this claim CONCLUSION For the reasons outlined the judgment of the district court granting partial summary judgment in favor of Ms Dore for 62 based on the appraisal 63 677 award and denying that portion of her motion for summary judgment seeking statutory penalties and attorney fees is affirmed The case is remanded for further action in accord with this opinion All costs of this appeal and the answer thereto are to be paid by appellant Shelter Mutual AFFIRMED AND REMANDED 8
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